Oil Commodities Trading:
Prices and How to Trade

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What is oil trading?

Oil trading is the buying and selling of assets based on oil, for profit. Oil is a global commodity that, when processed and refined, is used to power combustion engines in vehicles, as well as machinery, heating equipment, jet fuel, lubricants, plastics and much more. In the US, the world's top oil consumer, 44% of all oil is used to produce gasoline, with a further 20% used for diesel and heating oil. Oil is a non-renewable resource, with a 2021 BP report estimating that there are 1.71 trillion barrels of oil remaining in the world. At current rates of consumption, this equates to around 50 years' worth of oil.

These reserves and timespans may increase due to new discoveries or improved extraction technologies. However, oil's finite nature means its price can be highly volatile due to the forces of supply and demand. This makes it a promising choice if you're a trader wishing to speculate on price increases or decreases.

What are the two types of oil commodities traded?

There are hundreds of types of oil traded around the world, with different varieties used for different applications. When trading oil on the markets, however, there are two main benchmarks used to price up lesser-known types of oil, and as a price basis for speculative oil trading:

Brent Crude

Sweet (low sulphur) and light (easy to refine into gasoline) oil benchmark based on oil originally extracted from the Brent fields in the North Sea. Oils delivered overwater via tanker are often classified as Brent Crude.

West Texas Intermediary (WTI)

Slightly lighter and sweeter than Brent, WTI is a higher quality oil produced in North America. However, due to being produced on land, it is used to benchmark oils which require more expensive, land-based transport.

What are the trading hours for oil?

The trading hours for oil depend on the provider and the type of contract you want to open. The hours, in GMT +7, are detailed below.

Brent crude oil: You can trade Brent Crude Monday 07:00 to Saturday 03:45. There is a break each day from 04:00 - 07:00. (Wintertime: Delayed by 1 hour)
WTI crude oil: You can trade Crude oil Monday 05:00 to Saturday 03:45. There is a one-hour break each day at 04:00. (Wintertime: Delayed by 1 hour)

Oil markets typically exhibit greatest liquidity between the hours of 20:00 and 01:30 (next day) (Wintertime: Delayed by 1 hour). That's because during this time the New York Mercantile Exchange, one of the world's largest commodities exchanges, is open.

If you're looking for the best time to engage in oil trading, your trading times should be informed by your strategy. Learn how with our guide below. Create a commodity trading strategy.

US Oil Trading Chart

Past Performance: Past Performance is not an indicator of future results.

What factors influence the price of oil?

There are a wide range of factors which traders can better understand to trade oil more effectively.

Economic performance

If the global economy is performing strongly, the price of oil tends to increase as demand increases. That's due to oil being a driving force behind so many processes in the global economy, from transport to industry, to energy production. The release of economic data like GDP, unemployment levels, or even vehicle sales, can all influence oil prices.

OPEC

IOPEC includes the largest oil producers in the world, including Venezuela, Saudi Arabia, Iran, Iraq, and the United Arab Emirates. According to statistics for 2025, the cartel has control over 79% of all proven global oil reserves.
As a result, if OPEC increases production, prices drop, and vice versa. Political differences between OPEC and non-OPEC countries can influence the timing and occurrence of these production changes, as well as events such as pandemics or recessions.

Alternative energy
growth

Global efforts to combat climate change have resulted in the spread of renewable energy generation, electric cars, and other green technologies. While these forms of energy have yet to impact oil prices on a significant scale, they could do in the future.

Oil storage levels

Oil is constantly stored around the world, both as a means of storing surplus supplies, and as a means of protecting against future shocks. The state of oil storage can therefore have an impact on oil prices – if storage is full, prices might drop steeply, as in April 2020 when oil prices turned negative for the first time in history. Conversely, if storage is empty, oil prices might skyrocket.

US dollar strength

Oil trading prices are exchanged in US dollars. As such, a weak dollar can increase oil prices, while a strong one can lower them.

Speculation

It's always important to remember that oil prices can be supported or reduced by speculation related to any of the above factors.

Seasonal demand

Oil prices can increase during the Northern Hemisphere's winter season as demand for heating oil increases and consumers use cars more frequently. Conversely, if summers are especially hot, demand for energy can rise as more people use air conditioning.

Shipping availability

For Brent Crude, if shipping rates are high or ships are otherwise unavailable, the price of oil can increase in kind.

How to trade oil?

Oil traders have a range of financial instruments and trading approaches at their fingertips when trading in oil. These are some of the most popular and liquid trading methods and approaches.

Is oil a good investment?

Oil trading offers a range of benefits and drawbacks:

Liquidity

Oil markets are extremely liquid. That means you will be able to open and close positions rapidly and the likelihood of slippage will be lower than with more illiquid asset classes.

Volatility

Oil securities can be highly volatile on account of the commodity's sensitivity to all manner of economic, social, and political pressures. This can be a good thing for oil traders with high-risk appetites looking to make larger profits over a shorter time span but can increase losses too.

Leverage

Oil can often be traded with leverage, increasing the amount of exposure you have by up to 10 times. This can increase losses in kind, however.

Inflationary hedge

Since oil is in high demand, it can be a good choice for traders wishing to protect their capital from inflation over the long term.

Hedging tool

With a clear history of price movements and regular releases of data, oil trading can be used to hedge against riskier investments in your portfolio.

Uncertainty and risk

Oil is a finite resource, contradictory to decarbonisation, and potentially dangerous (consider the dramatic drop in BP's stock price following the Deepwater Horizon oil spill in 2010). As such, there are significant risks surrounding oil investments you should be aware of before oil trading.

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